Payday Loans Debt Consolidation

Managing Your Conventional Debts Using Pay Day Advance Loans

One of the most common reasons why people borrow pay day advance loans is to manage their monthly payment obligations toward conventional debts, such how much is accutane as mortgage and car loans. Both mortgage and auto loan are secured loans and missing monthly payments on these loans can result in getting your home or car seized by your mortgage company or auto loan lender. Obviously, home and car are two biggest and most necessary assets for anyone in the United States of America. Since payday cash advances are easy to borrow and they are also advertised in such an attractive way that people often get tempted to sign up for such lending programs without even realizing that these loans are extremely costly, which might eventually put them into a deeper debt trouble at a later stage.

Borrowing Payday Loans At The Interest Rate Of $30 Only

You can easily come across various payday lenders that offer pay day advance loans at an interest rate of only $30. This might sound quite tempting, but this figure is often misleading. In general, this rate of $40 applies to every $100 of loan issued for 14 days. It means if you are borrowing for three weeks, you will be charged $60 for every $100. If you borrow $500, you will be paying $300 in interest only. Various other charges are charged additionally, such as verification fee, processing fee and others. If you include those charges, the total cost of loan can be even more than the principal amount, that too, for a short period of three weeks only. If you calculate the annual percentage rate based on this figure, you will e shocked to see that payday advance lenders are charging interest and other charges at 4-digt APRs.

Payday Loans Are Supposed To Be Repaid On The Next Pay Day

The very concept behind pay day advance loans (that people often forget) is that you borrow a small amount of money now and then pay it back as soon as you get your next pay check. But, considering the extremely high cost of these loans, it is often not possible to make full repayment successfully. Most payday loan borrowers often make a partial payment and renew the remaining outstanding balance, which is the worst financial decision a person can ever make. After all, you will be required to pay interest at the same high rate for the extended period of time, which means the eventual loan balance will keep on growing, and soon it may become too high to manage (let alone repay).

Better Alternative Ways To Deal With Monthly Payment Problems With Conventional Loans

If you are going through a temporary financial crisis and are having great difficulty in meeting your monthly payment obligations for mortgage and car loans, you are advised to discuss your problem directly with your mortgage lender and car loan lender. They can provide some cheaper and safer option to manage these high-priority debts. For example, they may allow you to make interest-only

monthly payments for a couple of months until your finances get back on track. This way, there will not be any risk of losing your car or home. Refinancing can also prove to be a much better option to consider.

Overall, it should not be an exaggeration to say that pay day advance loans are temporary solutions to temporary problems, but if you do not repay them in time, they can become a horrible, permanent debt problem for you.

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